Definition of Firm

A business organization, such as a corporation, limited liability company or

partnership. Firms are typically associated with business organizations that
practice law, but the term can be used for a wide variety or business operation
units.

Definition of Industry
A classification that refers to a group of companies that are related in terms of
their primary business activities. In modern economies, there are dozens of
different industry classifications, which are typically grouped into larger
categories called sectors.

Individual companies are generally classified into industries based on their
largest sources of revenue. For example, an automobile manufacturer might
have a small financing division that contributes 10% to overall revenues, but the
company will still be universally classified as an auto maker for attribution
purposes.

Definition of Time-Period Basis
An implication surrounding the use of time-series data in which the final
statistical conclusion can change based on to the starting or ending dates of the
sample data. The concept discourages using a smaller time series, as chance
events are more likely to be reflected in the conclusion.

Definition of Long Run
A period of time in which all factors of production and costs are variable. In the
long run, firms are able to adjust all costs, whereas in the short run firms are
only able to influence prices through adjustments made to production levels.
Additionally, whereas firms may be a monopoly in the short-term they may
expect competition in the long-term.

In economics, long-run models may shift away from short-turn equilibriums, in
which supply and demand react to price levels with more flexibility.



Definition of Short Run
In economics, it is the concept that within a certain period of time, in the
future, at least one input is fixed while others are variable. The short run is not
a definite period of time, but rather varies based on the length of the firm's
contracts. For example, a firm may have entered into lease contracts which fix
the amount of rent over the next month, year or several years. Or the firm may
have wage contracts with certain workers which cannot be changed until the
contract renewal.